The evolving tariff landscape under the Trump Administration poses unique challenges – and opportunities – for businesses across the globe. Latin America and Spain in particular face a uniquely complex web of trade, immigration and national security policy shifts as geopolitical dynamics with the United States continue to transform. To help businesses with interests in these regions navigate such issues, FGS Global and Agencia EFE, the largest Spanish-language wire service in the world, brought together a panel of experts to make sense of the latest developments and their potential impacts.
A Changing View of Tariff Policy
The session opened with a bird's-eye view of multilateral relations. In short, given the persistent economic malaise in the middle and working classes, electorates in the United States and globally voted for change in recent election cycles – and change indeed has come. Tariffs have gone from being a tool for achieving economic goals to one tied to agendas related to migration, defense spending, illicit drugs and beyond. They have become a significant factor in transactional negotiations, especially with competing powers such as China. The dynamics of China's relationships with other countries now also play a role in these negotiations.
This has created vulnerabilities for Latin America, a region with high trade connectivity with both the U.S. and China. Not only will tariffs targeting China have knock-on effects in Latin America and Spain, but these regions will be forced to navigate their competing interests as they work to protect their own.
Where the Policy Stands
The tariffs are, however, still in flux. Different advisors within President Donald Trump’s sphere of influence have different views on the purpose of tariffs, leading to confusion and inconsistencies in policy. Power struggles within the White House and shifts in public sentiment, as well as legal setbacks for the administration, are compounding economic uncertainty.
In the face of this, countries in the region are left to wonder how they can continue to prepare, adapt and succeed.
Strategies for LatAm and Spain
One thing is certain: traditional predictive economic models won’t be of any help to foreign governments and companies trying to forecast policy formulation in the United States. In a country where political bases have an outsized influence, where individual personality traits have become extremely important catalysts and where information –and misinformation—quickly spreads through social media to the grassroots, traditional analysis frameworks simply won’t hold up. Instead, organizations and trading partners with economic interests in the United States need to:
Establish and cultivate alliances within key U.S. sectors that can influence the Republican base and Trump. For example, while conventional wisdom would tell you that California wineries would be all for blanket policies limiting access to European wine, closer inspection reveals they import all their cork from Spain and Portugal, or their glass bottles from Mexico and Canada. Carefully analyzing such dynamics could help vineyards in Spain’s Ribera del Duero find unexpected allies.
Conduct stakeholder mapping and coalition-building exercises. Developing an operation that maps all the relevant organizations and individuals influencing politics and policy formulation in the United States can help international stakeholders in reacting nimbly and appropriately in a very fluid policy situation.
Tailor messages to resonate with GOP interests. Understand the audience and their America First worldview and use that perspective when framing messaging. For example, a message that argues how important it is to keep the port of Charleston humming can go a long way with chambers of commerce in South Carolina and eventually GOP Sen. Lindsey Graham, a close Trump ally.
Have allies deliver this messaging. Leveraging credible spokespeople and outlets who the base trusts and accepts ensures that the message will be received.
Essentially, companies and policymakers that understand, and can adapt, to the fluid U.S. political and economic environment will be better positioned for success. Looking under the hood of American political dynamics, including at the impact of personality and the local and national dynamics at play, will be much more useful to understanding incentives and reacting accordingly than traditional approaches. Those who can speak to the current American political psyche will be the most successful in positioning their business and advancing their interests, especially in this uncertain time.
